Is There a ‘Big Obamacare Bubble’?

The Affordable Care Act has been plagued with problems since its beginning. And while news current cycles are dominated by the presidential election, race relations, and terrorism, healthcare legal expert Bryan Rotella notices a healthcare bubble is forming. As he writes in The Hill:

Millions of previously uninsurable sick people are flooding the insurance market, driving premiums sky high. As noted in the Fiscal Times, “The combination of market forces and limitations imposed by the [ACA] will put enormous pressure on insurers to up their premiums.” The pressure on insurers is undeniable, including the $650 million losses recently reported by UnitedHealth.

With these losses, rates on the exchanges are exploding. Exchange premiums in Michigan are set to jump up to 17.3 percent. Virginia average premium increases could go as high as 37.1 percent. Comparing the state monthly premium averages from 2013 to 2016, almost every single state has increased significantly. There is no stop-loss. In fact, two of three federal programs to manage this exact risk are due to expire in 2017. Without these programs to fall back on, many insurance companies likely will need to jack up their premiums even higher or bail out of the exchanges all together.

So how did we miss this? Like in “The Big Short,” nobody asked those actually working in the doctor’s offices their opinions. Dr. Tommy McElroy, CEO of an innovative concierge practice, Echelon-Health, is puzzled: “When the [ACA] was written, nobody came around to ask doctors what would happen when the most complicated patients were shuttled to the exchange plans. A small practice can’t survive; that’s why doctors are being bought up by hospital groups or abandoning insurance altogether for membership medicine.”

People who supported ACA simply thought that somehow the insurance companies would be fine just basically making less profit. Yeah, right… nope, those premiums are going to be covered by, you guessed it, the middle class. In Tennessee Blue Cross is proposing nearly doubling premiums. This is just the beginning. This bubble is indeed going to burst.. sadly, though, it won’t happen in time for the election.